Economic Storm Clouds Brewing for Argentina?

GS_Dirtboy

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The Argentine government's budget is based upon projected growth of 5.1%, however analysts are predicting 2.5% to 3.0% growth which will certainly put a dent in the government spending that has been a key economic driver over the last decade. The slowdown is due in part to a dry crop season, trade protections, and currency controls that the government put in place to try and stem capital flight.

AP Story Here

The K's have enjoyed almost 10 years of economic growth but it looks like the party might be coming to an end. At the same time, instability often times creates opportunity.

Considering all of the economic drivers do you see any opportunites for Foreign Direct Investment in Argentina in the near future? I welcome your comments.
 

El chabon

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Argentina did have an recession in 2009, like almost all the world, but it was less severe then in most other countries
 

Amargo

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There have been people on this forum posting meltdown predictions for the last 10 years. Nothing happened. Argentina has so many resources that not even the KKs can break it down.
 

jb5

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Storm? Let's say tsunami.

Foreign direct investment? Let's consider YPF. The Europeans will do limited business with AR. Let's consider unrepaid legal judgements to American companies. When we tell Americans we do business here we get reams of newsprint about no one willing to do business here now.

Next there's the import/export problem, the daily changing rules, the union 20% raises, cost of utilities going up, increasing crime, graft, over promising by CFK.......no, I'm not seeing much foreign investment anytime soon when there are sane, secure countries in LAM lik chile, Uruguay and Brazil.
 

trennod

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Its happening, China is slowing and in a resources led economy with a poor government, lack of foreign investment and / or interest in it, the outlook cant be great.
 

el_expatriado

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GS_Dirtboy said:
Considering all of the economic drivers do you see any opportunites for Foreign Direct Investment in Argentina in the near future? I welcome your comments.
I am continuing to invest in Argentina. I know plenty of other small businesspeople who are investing as well. Small-scale businesses are pretty much immune to the kind of government psychosis that the Ks like to inflict on all of us because there just isn't enough cash (caja) for them to go after.

If I had a huge cash-producing industry like oil, mining, banks, etc, I would be worried right now. But if, like me, you have restaurants, taxis, real estate, etc., then you are pretty much immune to government action.

And the fact that you can get $6 pesos per dollar on the CCL market means that if you have dollars you can buy up Argentine assets that are denominated in pesos for dirt cheap. They are saying that if the dollar floated freely it would be worth $4.80-5.00 on the open market. So the fact that you can get $6.00 per dollar means a huge savings for people investing today.
 

jb5

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I'd disagree that small businesses are not impacted. Just here we 've seen restaurants, bars and even a candy store harassed and closed. Id never buy property or heavynequipment. I do agree there are a few businesses that stay under the radar doing wel here, but as someone who owns one of those, I constantly wait r the other shoe to drop. We can just go home but what about our dared employees?
 

Charmed

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I work in the premium sector in BA, and we are definitely feeling it. Restaurants which were full on a Tuesday night in Puerto Madero, might be lucky if they are packed perhaps on a Friday night.
 

earlyretirement

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Definitely there are many more challenges now vs. just a few short years ago. Much of the smart money is exiting Argentina now or recently have already. I'm not saying there will be a total collapse but historically there is some crises about every 10 years or so. They are due for another crises. The writing is clearly on the wall now, especially with this lunatic CFK at the helm. Who knows what wacko restriction will come next.

Many foreigners have either headed for the exits already or in the process of it. And I DEFINITELY don't see much foreign investors wanting to invest in Argentina now for good reason. The risk/reward ratio is just not there compared to a few years ago.
 
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